INDEX

Serial no Context Name Page no

01 Abstract 02
02 Introduction 02-03
03 Impact Of Globalization On Bangladesh: 03-04
04 04
Meaning of Globalization
05 05-11
Positive Impacts of Globalization on the Economic
Condition of Bangladesh
06 11-12
Negative Impacts of Globalization on Economic Condition
of Bangladesh

07 Globalization in ICT Sector of Bangladesh 13-19

08 19-21
Recommendation for Eliminating Negative Impacts of
Globalization on Socio-economic Condition of Bangladesh
09 Problem Statement 22-23
10 Rational 23-24
11 Dissensions 24-32
12 Conclusion 31-32
13 References 33

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 GLOBALIZATION AND ITS IMPACT ON BANGLADESH
ECONOMY

ABSTRACT
Over the past decades, globalization has now become a new world order, which virtually influences
everything that comes in our mind. Developing countries like Bangladesh with vulnerable geopolitical
locations and weak economies are now looking at globalization to strengthen their economy to fight any
perceived threats. But the increasing role played by the western dominated institutions such as, the World
Bank (WB), International Monetary Fund (IMF), and the World Trade Organization (WTO) in setting the
rules under which globalization is played, has placed developing countries in a much disadvantageous
position vis-à-vis the developed countries. However, a closer look at the globalization will show that it has
both positive and negative impacts on the economy of Bangladesh. A thorough understanding of the effect
of globalization is needed to use its advantages to improve her economy. This may also help Bangladesh
maintain a sustained growth in the face of likely economic peril. This paper studies both negative and
positive impacts of globalization on some selected economic sectors of Bangladesh. It also studies some
ameliorative measures to overcome the negative impacts and also the ways to exploit the opportunities
created. Finally the paper recommends some measures for Bangladesh to meet the challenges of economic
globalization.

INTRODUCTION
Globalization in the broadest sense implies integration of economies and societies across the globe through
the flow of technology, trade and capital. It basically refers to a process that enables people, goods,
information, norms, practices and institutions to transcend national jurisdictions through markets,
technologies, interests and information flows. Four types of changes characterize globalization. First, it
involves a stretching of social, political and economic activities across frontiers, regions and continents.
Second, it is marked by the growing magnitude of interconnectedness and flows of trade, investment,
finance, migration, culture, etc. Third, it can be linked to a speeding up of global interactions and processes.
And fourth, the effects of distant events can be highly significant elsewhere and specific local developments
can have considerable global consequences. Thus the boundaries between domestic matters and global
affairs become increasingly fluid. Globalization, in short, can be thought of as the widening, intensifying
and growing impact of worldwide interconnectedness. It causes an expansion in the volume and variety of
cross border transactions in goods and services. Globalization is a long-term process of change. It has
economic, political and cultural dimensions, all of which can have a social impact. The different dimensions
of the process are interrelated and mutually reinforcing. There are, undoubtedly, significant potential
benefits of globalization. Openness to foreign direct investment can contribute to growth by stimulating
domestic investment, improving efficiency and productivity, or by increasing the knowledge applied to
production. Increased access to the domestic financial system by foreign banks may raise the efficiency of
the banking process thereby 2 lowering the cost of investment and raising growth rates. Trade openness may
facilitate the acquisition of new inputs, less expensive or higher-quality intermediate goods and improved
technologies that enhance the overall productivity of the economy. Conversely, the process of globalization
entails significant risks and potentially large economic and social challenges, particularly to the developing
countries. Openness to global capital markets has brought greater volatility in domestic financial markets
particularly in countries whose financial systems were weak to begin with and whose economic policies
lacked credibility. Similarly trade liberalization has led in some countries to reduced demand for unskilled
labour, lower real wages, job losses and income declines which have often resulted in higher poverty rates.

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As a result, there have been growing concerns about the negative effects of globalization, and an
increasingly polarized debate on the plight of the worlds poorest. It is very clear that the phenomenon of
globalization has come to stay. In fact, globalization has been described as a fast moving train that waits for
nobody.1 Intended passengers either jump onto it or risk of being left behind. Like every journey, every
passenger must be prepared to board at the right station, with the necessary kits and with a clear knowledge
or vision of his destination. There are obvious indications that Bangladesh is ill prepared to start this journey
and cope with the developments. Apart from the fact that most developing countries lack the basic
infrastructure to embark on industrialization drives, the inability to make sound economic policies,
unpredictability of changes in laws and pervasive corruption are critical obstacles to development. Therefore,
one of the greatest challenges faced by Bangladesh in this century is how to strengthen its participation in
the global economy in a manner that will bring widespread and sustainable benefits to its people.

IMPACT Of GLOBALIZATION ON BANGLADESH

Impact of globalization is obvious in the following spheres :

 Impact On Communication :With the impact of high-tech communication media and ultramodern
transportation facilities, the world has come closer. Now we can learn instantly what is happening in
the farthest region. Countries of the world have become like families in a village. They can share
their joys and sorrows like next-door neighbors.
 Impact On The Economy : The Impact Of globalization on Bangladesh economy cannot be denied.
Like the developing countries of the world our country is getting benefit out of border-less market.
Our GDP has increased. Garment industries are considered the foreign exchange earner. In terms of
investment, employment and exports, the functioning EPZs(Export Processing Zones) have been
greatly successful.
 Impact On Modern Technology: Globalization is now largely based on a strong technological
foundation. The electronic transfer of information via the internet has now created an instantaneous
and inter-connected world of information resulting in a 24-hour trading network. This technology has
largely changed banking and financial activities. Worldwide money transfer and transaction of
businesses have now become a matter of clicking the mouse of a computer. Some products like
software and TV schedules are also amenable to digital of electronic transmission. We can now buy
and sell goods through the electronic screen. Globalization is now only what technology makes
possible.
 Impact On Politics: After the fall of Soviet Union Communism fell down and the east -west conflict
was resolved. Moscow was no mote rival to Washington. Each and every country turned into
competitive economic market. The wave of globalization has also touched our politics. We can learn
the democratic norms and values now. Bangladesh has got the taste of democracy.
 Impact On Sports And Recreation: Sports play an important role in the development of
international relationship. Many international sporting events are organized from time to time. These
events are telecast worldwide by satellite and people all over the world watch them live. The sports
venue becomes a meeting place of people from different countries. They come closer to each other,
sharing views, opinions and friendship. Bangladesh is also the beneficiary of this opportunity.
 Impact On Education: Like other developing countries of the world, Bangladesh has identified
education as the key to prosperity and progress. Donor countries are contributing to the progress of
our literacy rate and overall education. Various international organizations have responded
dramatically with their generous aid in education sector. Many non-formal schools are being run.
Meritorious students are availing themselves of the foreign study scholarship.
 Impact On Our Culture: Although globalization is mainly connected with business, trade and
international relations, it is no longer viewed from that perspective alone. The tide of globalization is
now encroaching into other spheres too. Satellite Television channels and the Internet are bringing
all sorts of different customs and behavior into our homes. Under the influence of globalization,
global culture are steadily getting integrated with local cultures. Different cultures are constantly

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 interacting. As an independent nation, we have our own traditional social values, beliefs and attitudes.
But in the globalizing process, many foreign customs and beliefs are intruding on them.
 Impact On Family: Globalization exerts influences on our concepts of family. Commercialization
and rapid urbanization have resulted in breakdown of traditional large families into nuclear ones.
Expanded rate of female education is another example of the impact of globalization.

Taking the advantage of the idea of globalization, capitalist countries are exploiting and impoverishing the
workers of the developing countries. In the name of help and co-operation, the industrially developed
capitalist countries are exploiting the cheap labor available in poorer countries. This actually paves the way
for a lasting poverty so that the capitalists can continue to have a poor of cheap labor to draw from. The
exploited and impoverished workers of the developing countries are no much for a globalizing powerful
capitalism. As a result, the gap between wealth and poverty is ever widening. Globalization has put the
people of the world on the same vessel but in different cabins.

It is true that globalization has produced a window of opportunity for more countries to join the mainstream
of world economy. Through globalization process, the world can be knit together, cross-fertilization of
culture can take place and transfer of knowledge can become a reality. It has the hazards too and in the
ultimate analysis no country is safe from the hazards of globalization. We can conclude by quoting the
Apollo-7 astronaut that, "The thing that impressed me about looking to the earth from outer space was that
the borders between countries were not visible." National borders are virtually meaningless today. If we
want to be advanced, we should have co-operation and interdependence but not conflict and dependence. If
we can build up an atmosphere of mutual understanding and co-operation through the globalization process,
our world can certainly be a better place to live in.

Meaning of Globalization
The term Globalization has already become quite popular; it denotes an increase in economic integration
among nations. Broadly speaking, the term “globalization” means integration of economics and societies
through cross-country flows of information, ideas, technologies, goods, services, capital, finance and people.
The communication technologies play a vital role in these free movements across the world. All the people
of the world are being inter-connected. Process of global production helps rich countries in terms of low-
cost products. Poor countries also benefit with the creation of jobs, experience with advanced technologies
and investment. There are only several winners in the developing world from globalization, but many other
countries are little beneficial. In fact, economic crisis is rather intensifying in several poor and remote parts
of the world.
According to Khoo (2003) globalization is the trans-boundary movements of capital, people, goods,
information and culture, burst into intellectual awareness in the late 1980s and the 1990s”.
According to Giddens (1990) the concept can be defined as the intensification of worldwide social relations
which link distant localities in such a way that local happenings are shaped by events occurring many miles
a ways and vice versa.
Steger (2004) has noted the varied description of the term offered by different scholars as 'increasing global
interconnectedness', 'the rapid intensification of worldwide social relations', 'the compression of time and
space', 'a complex range of processes, driven by a mixture of political and economic influences, and 'the
swift and relatively unimpeded flow of capital, people, and ideas across national borders.

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POSITIVE IMPACT OF GLOBALIZATIO ON THE ECONOMIC CONDITION OF
BANGLADRSH

Globalization means “integrating’ the economy of a country with the world economy. Globalization is a
process of change resulting from a combination of increasing cross-border activity and spread of
Information Technology, facilitating real-time communication worldwide”. The aim of globalization is to
benefit individual economies around the world by making markets more efficient, increasing competition,
limiting military conflicts, and spreading wealth more equally.
The following are the positive effects of globalization on business-
Foreign Direct Investment- Foreign Direct Investment (FDI) tends to increase at a much greater rate than
the growth in world trade, helping boost technology transfer, industrial restructuring, and the growth of
global companies.
Technological Innovation- Increased competition from globalization helps stimulate new technology
development, particularly with the growth in FDI, which helps improve economic output by making
processes more efficient.
Economies of Scale- Globalization enables large companies to realize that Economies of Scale reduce costs
and prices, which in turn supports further economic growth, although this can hurt many small businesses
attempting to compete domestically.
Expansion of Market - Globalization helps in the expansion of the market for trade and business. The
business Institutions are free to expand their business worldwide. National boundaries become meaningless
for the multinational companies as they get unrestricted power to exploit resources of the whole world
economy.
Large Size- Globalization results in expansion of business Institutions because their business area is not
restricted to a nation only. Thus, produce in huge quantities.
Free Determination of Production Capacity- Due to globalization business Institutions themselves cannot
fix their production capacity. It entirely depends on market power
Indigenous Multinational Corporation- Globalization helps in the development of indigenous
multinational companies/corporation along with multinational corporations. Such kind of corporations is still
establishing.

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Increase in Employment Opportunities- Yet, direct employment opportunities have been reduced due to
globalization, but there is an increase in indirect employment opportunities in the field of services. There is
an increase in employment opportunities in small and cottage industries. It also increases the chances of self-
employment.
Increase in Savings and Investment- Due to globalization, there will be an increase in employment
opportunities and therefore earnings. This will increase investment and saving habits and this further
increase the rate of capital formation in the country
Development of Infrastructure- The Rapid development in infrastructure facilities like light and electricity,
roads, Railways, harbors, Airways, alternative Sources of Industrial power, telephone etc which helps on
economic growth.
Brand Development- Globalized economy favors the business of branded goods/items. This is not only
restricted to two durable goods are capital goods but also to normal drinks, cereals, clothes etc. Or in other
words, the market is full of brand equity.

Technical Development- Globalization makes available technical knowledge worldwide. This helps in the
development of Technical research, discoveries and new techniques of Industrial Production.
Transfer of Business- Due to globalization, business Institutions acquire new field for business. For
example- during the Gulf war, Kuwait Bank had transferred its business to Bahrain sent information through
fax for continuing business.
Flow of Resources- Globalization Makes the process of flow of resources like labour, goods, capital,
techniques information etc. among different countries of the world.
Freedom of Business- Globalization has made the business institution free from foundations off licenses,
rules, and regulations, inspectors, bureaucracy, traffic etc.
Development of Professional Management- Globalization has helped in the development of professional
management in the country.
Promotion of Combinations- Due to globalization, many large and small trade Institutions of the country
are combined together. This will make sure the success of non-profitable Institutions by merging them with
profitable Institutions

It would be rather difficult to discuss the extent of the positives that globalization has had on the world at
large. But still, here are some of the positive effects of globalization and the positive impacts they have had
on so many demographic segments of society of Bangladesh.

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Education
Globalization from the point of view has positive effects as well as negative effects. It has increased the
access of higher education example universities and reducing the knowledge gap in developing countries, it
equally has negative aspects which can seriously threaten universities in those countries. From point of view
it has brought more positive effects to developing countries through increasing access to higher learning
institutions. Today you can move in the search of the best educational facilities in the world including
developing countries without any hindrance. This is due to increased output from secondary schools, greater
participation of women in higher education, a growing private sector demand for graduates, and the
exorbitant costs of acquiring education in foreign countries, especially those in the north (Mohamedbhai G.,
2002).

Poverty alleviation
As far as poverty reduction is concerned, globalization played a role in poverty reduction in developing
countries. In deed most developed countries experienced reduction in poverty in the proportion of their
living below the poverty line, including fast developing countries like China, India, Vietnam. While other
countries like Sub-Saharan Africa registered an opposite trend (Lee E., 2006).

Employment situation
Through globalization, people from different countries are provided with jobs opportunities within the
global. It has created the concept of outsourcing. Developed countries prefer to provide work to developing
countries where costs are cheap. Work such as customer support, software development, accounting,
marketing and insurance are given to developing countries like India. Therefore the country that is given the
work enjoys by getting jobs.
It has given an opportunity to invest in the emerging markets and tap up the talent which is available there.
In developing countries, there is often a lack of capital which hinders the growth of domestic companies and
hence, employment. In such cases, due to global nature of the businesses, people of developing countries too
can obtain gainful employment opportunities (Pillai P.,2008).

Competition
One of the most visible positive effects of globalization is the improved quality of products due to globe
competition. Customer service and the ‘customer is the king’ approaches to production have led to improved
quality of products and services. As the domestic companies have to fight out foreign competition, they are
compelled to raise their standards and customer satisfaction levels in order to survive in the market. Besides,
when a global brand enters a new country, it comes in riding on some goodwill, which it has to live up to.
This creates competition in the market and a survival of the fittest situation.

Global market
Most successful emerging markets in developing countries are a result of privatization of state owned
industries. In order for these industries to increase consumer demand many of them are attempting to expand
and extend their value chain to an international level. The impact of globalization on business management
is seen by the sudden increase of number of transactions across the borders. In protecting yields and
maintaining competitiveness, businesses are continuing to develop a wide range of their footprint as it
lowers cost and enjoys economies of scale (Shah A.,2009)

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Multinational corporations is a result of globalization. They occupy a central role within the process of
globalization as evidenced through global foreign direct investment inflows. Their concentrations within
Europe in western economies has led to size constraints, therefore there is a need for new geographical areas
to operate whereby they will face a lot of competition in the market. Through this they will enlarge their
market and enjoy economies of scale as globalization facilitates time space compression, economies
compete at all levels including that of attracting investors (Smith V.A and Omar M.,2005).

Cross-cultural management
Globalization tend to be the realm of elite because in many parts of the world they are the only people who
are affluent enough to buy many of the products available in the global marketplace. Highly educated and
wealthy people from different backgrounds interact within a westernized milieu. Western styles, since are
symbols of affluence and power, the elite often embraces western styles of products and pattern of behavior
in order to impress others. Today Western culture and patterns of behavior and language are staples of
international business (Asgary N. and Walle A.H.,2002).
United states seems to have powerful impact upon many other countries and societies. The world today has a
popular cultural force. The popular consumer culture of the economically dominant West is relentlessly and
inevitably transforming other regions, cultures, nations and societies. In addition, such perspective imply
that technological change, mass media, and consumer oriented marketing campaigns work in tandem to
remake whatever they touch in their own image. Even attitudes and ideas about society, religion and
technology are transformed by cultural diffusion brought by globalization. Example, in America McDonalds
represent fast, cheap and convenient food while it is not the same worldwide. It’s of high price in other
countries like China and Russia where it involves cultural experience (Walle A.H, 2002)

Foreign trade
Globalization has created and expanded foreign trade in the world. Things that were only found in
developing countries can now be found in other countries across the world. People can now get whatever
they want and from any country. Through these developed countries can export their goods to other
countries. Countries do business through international trade, whereby they import and export goods across
the global. These countries which export goods get comparative advantages. Organizations have been
established with a view to control and regulate the trade activities of the countries in the world so to have
fair trade. World trade organizations emerged as a powerful international organization capable effectively
influencing individual governments to follow international trade rules, copyrights, policies on subsidies,
taxes and tariffs. Nations can not break rules without facing economic consequences (Piaseck R. and
Wolnicki M., 2004) .
The number of nations that are dependent on trade, foreign capital, and the world financial markets
increased greatly. Countries engaged in foreign trade enjoy comparative advantage. The post Recardian
trade theories predicted that specialization in labor and capital intensive goods would bridge enormous wage
gaps between the poor and the rich countries, that is the developing and developed countries, sparing the
latter from massive labor immigration (Gerber J., 2002).

Resource Imperative
Developed countries need natural and human resources of the developing countries while developing
countries need capital, technology and brainpower of the wealthier countries. Developed countries’
economies are increasingly dependent on the natural and human resources of the developing nations.

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Growing interdependence of nations and their activities on one another fostered by the depletion of natural
resources; as well as overpopulation (Harris P.R.,2002).

Foreign investment
One of the most visible positive effects of globalization in Bangladesh is the flow of foreign capital. A lot of
companies have directly invested in India, by starting production units in India, but what we also need to see
is the amount of Foreign Investment Inflow that flows into the developing countries. Indian companies
which have been performing well, both in India and off the shores, will attract a lot of foreign investment,
and thus pushes up the reserve of foreign exchange available in India. This is also one of the positive effects
of globalization in US and other developed countries as developing countries give them a good investment
proposition.
Managers’ objectives might not be the same with those of stockholders in some situations. The more
complex the corporation the more difficult it is for shareholders to monitor management’s actions whereby it
provides the managers more freedom to act in their own self-interest at the expense of shareholders.
Multinational firms are more complex than national firms. Managers might favor international
diversification because it reduces firm specific risk or adds to their prestige. These goals might be of little
interest to shareholders. This divergence of interests between shareholders and managers, might reduce the
value of multinationals relative to domestic firms (Saudagaran S.M.,2002)
Foreign investment is a direct result of globalization. Foreign investment is always welcomed as it provides
resources, capital and technology to a country that will support economic development of the host country.
This improves employment as in direct and indirectly. Increases exports to a country and thereby improves
the current account and therefore will help to the repayment of foreign debt. This however has some
criticisms for leading to too much foreign control (Kaitilia V and Kotilainen M., 2002).
Developing countries can use general or specific industrial and trade policies to be more or less welcoming
to foreign direct investments, capital and foreign tourist services. They can directly and indirectly shape
their participation in the economic activities in the globe (Piasecki R. and Wolnicki M., 2004).

Market sector
Globalization of markets in developing countries is growing so fast. The emergence of global markets for
standardized consumer products on a previously unimagined scale of magnitude. This brought benefits
which are economies of scale in production, reduced world prices, distribution, marketing and management
(Levitt T., 1983)
IKEA is one of the company that is growing fast in developed countries. Its market is increasing within the
global. It has become the world’s largest home furnishings retailer. The managers are facing a lot of
challenges in managing them (Nanda A., 1990). IKEA can now be found in so many places in the world
example Bangladesh.

Culture
The positive effects of globalization on culture are many! Not all good practices were born in one
civilization. The world that we live in today is a result of several cultures coming together. People of one
culture, if receptive, tend to see the flaws in their culture and pick up the culture which is more correct or in
tune with the times. Societies have become larger as they have welcomed people of other civilizations and
backgrounds and created a whole new culture of their own. Cooking styles, languages and customs have

9
spread all due to globalization. The same can be said about movies, musical styles and other art forms. They
too have moved from one country to another, leaving an impression on a culture which has adopted them.

Cultural Development in Bangladesh

Cultural Progress and human development are closely linked to each other in any society. the Stage of
cultural development influences the course of progress of the society.
To build up infrastructure of cultural development in line with the course of cultural progress in the world
context Bangladesh shilpakala Academy, Bangla Academy, National Museum, Nazrul Institute, Folk Arts
and crafts foundation, Cox’s Bazar cultural centre, Tribal Cultural Institutes in Rangamati, Banderban &
Birishiri etc. are engaged in promoting cultural development under the Ministry of cultural affairs. Already
Bangladesh culture has taken a foothold on the world stage. Bangladesh has signed cultural pacts with 39
countries of the world to augment the level of mutual friendship and understanding. Many exchange visits of
cultural teams, Students, scholars, cultural Personalities are taking place under cultural exchange
programmes. Performance and exhibition programmes of music dance. paint works, handicrafts.
The National Theatre Bhavan with 750-seat theatre hall and a 300 seat experimental Hall have been built in
the premises of Bangladesh Shilpakala Academy at Segunbagicha Dhaka with the objective of promoting
drama. music and dance. Construction work of National Music Dhaka Centre and National Art Galary
Bhavan are also about to be completed. Tribal cultural Institites at khagrachari, Moulavibazar and Rajshahi,
Lalan Academy in Kustia have been completed. Bangla Academy has published many books Promoting
higher education, literature and folklores. Bangla Academy and National Book centre are jointly organizing
book fairs at National levels.
Success in human development that Bangladesh has achieved has been duly reflected in Human
Development Report of 2004, 2005 & 2006 published by UNDP-Bangladesh has been able to place it self
among the “Medium Human Development” Category of countries like India, Sri-Lanka for three
consecutive years. Adoption of realistic programmes for human development and poverty alleviation and
their implementation has brought this success. In the report prepared for the least developed countries 2004
in the conference of the United Nations commission for trade & development (UNCTAD), Bangladesh has
been created and has already achieved two targets of the MDGs i.e. in respect of removing inequality
between men and women in education and providing for safe drinking water for the populace.
Bangladesh is also expected to be able to achieve the other Millennium Development Goals aimed at
ensuring human welfare.
It is social before that cultural progress and human development are closely linked to each other so it would
be evident from the above table that most of the SAARC countries witnessed positive trends in human
development over the last three decades. It is heartening to note that Bangladesh has further improved its
position in HDI rank from 139 to137 as well as increased HDI values consistently the years as reported by
the various Human Development Report published by UNDP.

Legal Effects
Increased media coverage draws the attention of the world to human rights violations. This leads to
improvement in human rights. Global economic growth does not necessarily make people happier,
worldwide free trade, should also benefit humanity as well as protect nature, not just reward managers and
stockholders. Those who would be authentic leaders need to address inequalities. Globalization should

10
promote openness and information along with exchange with greater democracy and prosperity (Harris P.R.,
2002).
Gone are the days where the limited jurisdiction became a hindrance in the prosecution of criminals. These
days due to international courts of justice, these criminals can no longer seek asylum in a foreign country,
but will be brought forward and there will be justice. Due to globalization, there is also an understanding
between the security agencies and the police of two or more different countries who will come together to
curbglobal terrorism. Hence, it is now possible to catch the perpetrators of crime irrespective of which
country they choose to hide in. This is undoubtedly one of the greatest positive effects of globalization on
society.

Technology
This is a powerful force that drives the world toward a converging commonality. It has proletarianized
communication, transport, and travel. People from different places everywhere wants all the things they
have heard about, seen, or experienced through technology. Organizations through its managements can
obtain knowledge from different places in the world that can be used in the organization.
Television and medias played a big role in influencing the perception of the world, from a relatively small
national unity and reality, into a global market and international concerns. As multinationals establish
subsidiaries in new locations, they transfer know how from the parent to the local operation. Knowledge
flows from one unit to another as a whole organization benefits from development activity. One of the ways
that organizations use in knowledge transfer is the movement of personnel, which takes place within
multinationals. This build up a bank of knowledge about working in different situations with people from
different cultures and this represents a stock of knowledge that could be developed and used to benefit the
organization (Kamoche, 1997).
.

NEGATIVE IMPACT OF GLOBALIZATION ON ECONOMIC CONDITION OF BANGLADESH

Globalization has few adverse effects on developing countries like Bangladesh. Some adverse consequences
of globalization include terrorism, job insecurity, currency fluctuation, and price instability.

Terrorism
It is a significant problem in most developed countries. Due to worldwide integration, people travel a lot.
Some of them move abroad for studying, business, visiting relatives, work and access hospitals services.
However, not all of them are totally honest. Lots of terrorists came to a foreign country with a worker visa
having a hidden goal to perform a terrorist attack. It’s a problem that has posed fear among citizens who
can’t trust their neighbors. Unfortunately, terrorists recruit young people, residents of the country and make
them believe they are doing the right things. That’s why there are fear, mistrust, and tension in society.

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Job Insecurity
Before globalization, skilled people got employment in government sectors and companies where they
received high salaries. Job opportunities were waiting for those who completed colleges and earned a degree.
People would resign a job and quickly get another. Due to globalization, there are many people seeking
employment all over the world. Employers take advantage of cheap labor. One can get a dismissal because
of a slight mistake as the employer can find a skilled worker who is ready to be paid less.

Price Instability
Price instability is a significant effect of globalization on business. Some people establish industries
overseas where they get cheap raw materials and labor. They can cut production costs and sell their goods at
a low price. Due to competition, some high-quality products differ in prices. No matter how the World Trade
Organization has tried to control price fluctuation, their efforts are not successful. These companies reach
out to consumers using modern technology. Successful businesses are for those who can find a competitive
advantage and especially make high-quality products for a low price.

Currency Fluctuation
International trade buys and sells products using the US dollar. The price of dollar fluctuates day-to-day in
developing countries, this results in imbalanced economy and un-normal prices for goods and services.
National currencies are affected the most by IGOs.

Exploitation of Labor
Globalization has led to exploitation of labor. Safety standards are ignored to produce cheap goods. “In
practice, however, the recent experience in Latin America has been that many such open-handed
multinationals moved their operations to, for example, China or South East Asia because of cost and market
considerations” (Piasecki R. and Wolnicki M., 2004).

Fluctuation in prices
Globalization has led to increased market competition, hence leading to fluctuation in prices. For example,
developed countries like the USA have been forced to reduce their products prices, because countries such
as China offer the same products at cheaper prices. This is because the production cost in China is lower
than in the USA. As a result, for developed countries like the US to withstand the competition and have
customers, they are forced to lower their prices. The impact is adverse, as the ability to sustain social
welfare in the US gets reduced.

Fast depletion of local resources

On the basis of above study we can say that globalization is not a free lunch as an outward looking. It is a
mixed bag of success and failures. Having gone through positive and negative effect of globalization of we
can say that it is not equally beneficial for all countries of the world. So we need a policy of globalization
which is beneficial, creates opportunities with the objective of growth, employment and equity and raise the
welfare of all people throughout the world. Government should adopt measures to ensure fair globalization
policy.

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GLOBALIZATION IN ICT SECTOR OF BANGLADRSH
The advancement of Information Communication Technology makes the vast treasure of all forms of
knowledge, information, inventions, methodologies, techniques, process and technologies from the entire
global available to us by accessing via internet. It is hopeful for us that information technology already made
inroads into our society, indeed into our psyche, for all its economic backwardness, Bangladesh has easily
taken to the IT world. However, like many other developing countries, diffusion of information technology
(IT) is being severely restricted in Bangladesh because of poor telecommunication infrastructure, limited
fixed time access, unreliable conductivity and inadequate bandwidth. So it will require some innovation
from our part to take advantage of this vast knowledge base.
Information Communication Technology encompasses the generation of contents, processing, manipulation,
storage, routing, transmission, switching, packaging and usage of information to assist our day to day
business. Faster processor like Pentium iv, smarter software packages, high speed transmission and routing
capabilities with submarine cable for example, help us to take the optimum benefit from this `Global ocean
of knowledge, that match our everyday need. The knowledge from all the global sources are stored and
continuously being up-to-date in thousands of servers which are interconnected via a net-work with very
high speed transmission and switching capability called internet.

 Present State of ICT in Bangladesh

The use of computer started in Bangladesh in 1964 when the Atomic Energy commission installed a
multiframe computer. computers began to be used commercially from mid 1980s and since then it has
traveled a long way and the last few years in particular have witnessed tremendous advancement in the use
of computers.
Due to government incentives like exemption of duties, a vibrant hardware market has developed in
Bangladesh and the prices of hardware have come down substantially over the last few years. This trend
helped in rapid expansion of ICT use in business and also at the household level.
With deregulation of VSAT, an rapid growth of ISP services took place in recent days. At present there are
some 61 internet service providers in the country with VSAT Connectivity mostly through Hong Kong
Singapore.
All the ISPs are in the private sector and provide a range of internet services like e-mail, browsing, chatting
PC to PC call, net to phone, e-mail to fax etc. Today cyber cafes have mushroomed in Dhaka and some other
majors cities like Chittagong and Sylhet where young people have become the regulars.
The BTTB & the state owned telecom company “Tele-Talk” have also started providing ISP services the
years back.

 Bangladesh in the Information Super Highway

International Telecommunication system of Bangladesh was dependent on Satellite which was slow and
having narrow band width.
According to Telecommunication policy of the government, International Telecommunication network
system is being regulated by BTTB. Bangladesh has been connected with high speed submarine cable
consortium called SEA-ME-WE-4 to facilitate economical modern telecommunication and low price ICT

13
services. Laying of Error! Not a valid link.-4 submarine cable was completed in December 2005 and has
been operating since May 2006.
With the use of submarine cable activities surrounding information and communication technology will be
steeped up rapidly in the country. The upcoming generation next will get unhindered access to the
information super highway and it will also augment new employment opportunities in the country.

 Telecommunication & Bangladesh

For modernization, improvement and extension of a telecommunication system of the country, government
has taken a series of initiatives. Mobile phone service from the public sector installed under the project
titled ’10 lakh T & T mobile phone (2.5 lakh in the first phone) a separate company named “Teletalk” has
already been established to operate the mobile phone services. We can see a huge number of subscribers are
using all phones @ Tk. 2 per minute at present. Here it is mentionable that a big amount of foreign
investment has been invested in this sector; accordingly a huge number of unemployed manpower also have
been provided in this sector.
After June, 2006, 1,53,17,303 subscribers are using either fixed phone or cell phone. It is a radical change in
our telecommunication sector . This figure is increasing day by day significantly & Bangladesh is getting
connected with the global village rapidly.

 Bangladesh and Hi-Tech Park

To provide modern infrastructure and administrative support services and to create an efficient working
environment for the development of information Technology, electronics, telecommunications, engineering
& other knowledge based industries, government has planned to establish a Hi Tech Park in the country at a
cost of TK 25 core.
Currently more than 50 soft ware & IT Service companies in Bangladesh are exporting software and their
services to the different countries which include USA, Uk, Australia Canada, Denmark, KSA, Japan,
Sweden, UAE Germany, Italy, Netherlands, Norway, Nepal, France etc. Some important users of
Bangladeshi software are Nokia, Japan Airlines, World Bank, US Postal Department and Us Department of
Agriculture. To meet the growing need of skilled IT professional at home & abroad in the Bangladesh Korea
Institute of Information and communication Technology (BKIICT) has been established in the ground floor
of BCC Bhavan in Bangladesh with the technical assistance from Korea.

POSITIVE EFFECT OF GLOBALIZATION ON THE SOCIAL CONDITION OF BANGLADESH

Globalization describes how different world cultures, populations, and economies are interdependent from
each other. It is a consequence of cross-border business. Technology, goods, investments, information, and
services along with the labour market are the most popular components of such activity. Nations have
established worldwide integration over many centuries by enabling economic, political, and social
partnerships.
Globalization is mainly connected with business, trade and international relations, it is no longer viewed
from that perspective alone. The tide of globalization is now encroaching into other spheres too. Satellite
Television channels and the Internet are bringing all sorts of different customs and behaviour into our homes
(Nederveen Pieterse, 2012). Under the influence of globalization, global culture are steadily getting

14
integrated with local cultures. Different cultures are constantly interacting. As an independent nation, we
have our own traditional social values, beliefs and attitudes. But in the globalizing process, many foreign
customs and beliefs are intruding on them.
Globalization exerts influences on our concepts of family. Commercialization and rapid urbanization have
resulted in breakdown of traditional large families into nuclear ones. Expanded rate of female education is
another example of the impact of globalization.
Cross-Cultural Factor
Cultural globalization refers to the transmission of ideas, meanings, and values around the world in such a
way as to extend and intensify social relations. This process is marked by the common consumption of
cultures that have been diffused by the Internet, popular culture media, and international travel. This has
added to processes of commodity exchange and colonization which have a longer history of carrying
cultural meaning around the globe. And, in the perspective of Bangladesh nothing exception.
Competition
One of the most visible negative effects of globalization is competition. Competition affected industries in
some developed countries to source cheap raw materials and labour to decrease prices. People from the first-
world can afford themselves to buy products. Competition causes increased communication of ideas and
innovation as people try to find a competitive advantage for their business. Besides, Competition has
become a vital factor in changing life style. People in are competing each other’s to earn more and more
money. So, this became a negative factor.
Moral and Religious factor
Globalization of free flow of information via high technology and the movement of peoples cross borders
can only positively help religious tolerance to increase. But, there are some negative impacts too.
Globalization impact creating moral and religious degradation. Western culture vanishing ethical values and
making a negative impact on people’s personality.
Youth degradation
With the impact of globalization new generation has becoming more disrespectful, ill-breaded, and less
educated then the last one. Education for the young kids and growing teens means nothing, it’s not valuable
for them, and they don't see it as a necessity. Furthermore the kids are turning to be more aggressive and
more violent than ever before. Moral degradation of youth is an important problem of emerging due to the
negative impact of globalization.
Unemployment
In almost all developing countries a big percent of the working population relied on casual jobs in industries
until globalization took root. The advancement of technology has reduced such employment and increased
global need for skilled professionals. Majority of people don’t have skills, while the available jobs are
poorly paid due to high demand caused by globalization (Haugen and Musser, 2011). Most of the people are
left unemployed and unable to meet their basic needs resulting in increased criminal activities such as
burglary, pickpocketing, and murder and drug abuse. The rate of unemployment and poverty keeps growing
as the gap between the rich and the poor widens.

15
Increased Lifestyle diseases
Globalization has brought in the consumption of processed foods, planting crops using chemicals to
minimize the duration of growth and increase profit. In order to benefit from business, animals such as the
cows are fed on chemicals that make them produce a lot of milk or increase in weight for those that are sold
for the meat industry. Due to increased ingestion of chemicals from foods, chronic diseases are on the rise
(UKEssays.com, 2020). The mortality rate is high. Furthermore, there is a reduction in the lifespan in the
developing countries.

Spread of fast foods Habit

Fast foods chain is growing very fast which is one of the health factor. But some of the most rapid growth is
occurring in the developing countries, where it’s real changing the way people eat. Most people prefer to
buy fast foods because it’s cheap and quick. This replaces home cooked fare enjoyed with family and friends.
Traditional diets and recipes are yielding to sodas, burgers, and other highly processed and standardized
items that have a lot of fat, sugar, and salt resulting a global epidemic of diabetes, obesity, and other chronic
diseases. Meanwhile, fast food producers require farmers to raise uniform fields of crops and herds of
livestock for easy processing, eliminating
Technological disaster
There is no doubt that technology is playing a critical role in developing societies as countries depend on it
in all disciplines of life. Countries all over the globe are competing to invent and develop the highest
technological devices that can maintain the highest efficiency and accuracy of the work. Starting from 1980s,
people started to use technology every day. The use of technology kept rising dramatically that people used
it in tiny things. That overuse resulted in many negatives. There are many negative effects of overusing of
technology on societies but the three major effects could be health problems, privacy problems and social
problems.
Western culture
Culture is very important for one’s society, it is the invisible bond which ties people together. The art,
literature, language, and religion of a community represent its culture. Bangladesh has a rich and unique
culture that has preserved, established traditions throughout history (En.wikipedia.org, 2020). But with the
passing time the western culture, not only influenced Bangladesh politically, economically, and socially, but
it also influenced their minds and culture to such an extent that even subsequent generations have absorbed
the influence as well. Westernisation has been spread throughout our country because of media and satellite
TV which are causing negative impact on society.
Cheap standard of life style
Rapid changes in diets and lifestyles resulting from industrialization, urbanization, economic development
and market globalization, have accelerated during the last decade and are having a significant impact on the
health and nutritional status of populations, particularly in developing countries and those undergoing rapid
socioeconomic transition. While standards of living have improved and the access to services has increased,
there have also been significant negative consequences in terms of inappropriate dietary patterns and
decreased physical activity and a corresponding increase in diet-related chronic diseases, especially among
the poor.

16
Globalization describes how different world cultures, populations, and economies are interdependent from
each other. It is a consequence of cross-border business. Technology, goods, investments, information, and
services along with the labour market are the most popular components of such activity. Nations have
established worldwide integration over many centuries by enabling economic, political, and social
partnerships.
Globalization is mainly connected with business, trade and international relations, it is no longer viewed
from that perspective alone. The tide of globalization is now encroaching into other spheres too. Satellite
Television channels and the Internet are bringing all sorts of different customs and behaviour into our homes
(Nederveen Pieterse, 2012). Under the influence of globalization, global culture are steadily getting
integrated with local cultures. Different cultures are constantly interacting. As an independent nation, we
have our own traditional social values, beliefs and attitudes. But in the globalizing process, many foreign
customs and beliefs are intruding on them.
Globalization exerts influences on our concepts of family. Commercialization and rapid urbanization have
resulted in breakdown of traditional large families into nuclear ones. Expanded rate of female education is
another example of the impact of globalization.

Cross-Cultural Factor
Cultural globalization refers to the transmission of ideas, meanings, and values around the world in such a
way as to extend and intensify social relations. This process is marked by the common consumption of
cultures that have been diffused by the Internet, popular culture media, and international travel. This has
added to processes of commodity exchange and colonization which have a longer history of carrying
cultural meaning around the globe. And, in the perspective of Bangladesh nothing exception.

Competition
One of the most visible negative effects of globalization is competition. Competition affected industries in
some developed countries to source cheap raw materials and labour to decrease prices. People from the first-
world can afford themselves to buy products. Competition causes increased communication of ideas and
innovation as people try to find a competitive advantage for their business. Besides, Competition has
become a vital factor in changing life style. People in are competing each other’s to earn more and more
money. So, this became a negative factor.

Moral and Religious factor

Globalization of free flow of information via high technology and the movement of peoples cross borders
can only positively help religious tolerance to increase. But, there are some negative impacts too.
Globalization impact creating moral and religious degradation. Western culture vanishing ethical values and
making a negative impact on people’s personality.

Youth degradation
With the impact of globalization new generation has becoming more disrespectful, ill-breaded, and less
educated then the last one. Education for the young kids and growing teens means nothing, it’s not valuable
for them, and they don't see it as a necessity. Furthermore the kids are turning to be more aggressive and
more violent than ever before. Moral degradation of youth is an important problem of emerging due to the
negative impact of globalization.

17
Unemployment
In almost all developing countries a big percent of the working population relied on casual jobs in industries
until globalization took root. The advancement of technology has reduced such employment and increased
global need for skilled professionals. Majority of people don’t have skills, while the available jobs are
poorly paid due to high demand caused by globalization (Haugen and Musser, 2011). Most of the people are
left unemployed and unable to meet their basic needs resulting in increased criminal activities such as
burglary, pickpocketing, and murder and drug abuse. The rate of unemployment and poverty keeps growing
as the gap between the rich and the poor widens.

Increased Lifestyle diseases

Globalization has brought in the consumption of processed foods, planting crops using chemicals to
minimize the duration of growth and increase profit. In order to benefit from business, animals such as the
cows are fed on chemicals that make them produce a lot of milk or increase in weight for those that are sold
for the meat industry. Due to increased ingestion of chemicals from foods, chronic diseases are on the rise
(UKEssays.com, 2020). The mortality rate is high. Furthermore, there is a reduction in the lifespan in the
developing countries.

Spread of fast foods Habit

Fast foods chain is growing very fast which is one of the health factor. But some of the most rapid growth is
occurring in the developing countries, where it’s real changing the way people eat. Most people prefer to
buy fast foods because it’s cheap and quick. This replaces home cooked fare enjoyed with family and friends.
Traditional diets and recipes are yielding to sodas, burgers, and other highly processed and standardized
items that have a lot of fat, sugar, and salt resulting a global epidemic of diabetes, obesity, and other chronic
diseases. Meanwhile, fast food producers require farmers to raise uniform fields of crops and herds of
livestock for easy processing, eliminating

Technological disaster
There is no doubt that technology is playing a critical role in developing societies as countries depend on it
in all disciplines of life. Countries all over the globe are competing to invent and develop the highest
technological devices that can maintain the highest efficiency and accuracy of the work. Starting from 1980s,
people started to use technology every day. The use of technology kept rising dramatically that people used
it in tiny things. That overuse resulted in many negatives. There are many negative effects of overusing of
technology on societies but the three major effects could be health problems, privacy problems and social
problems.

Western culture
Culture is very important for one’s society, it is the invisible bond which ties people together. The art,
literature, language, and religion of a community represent its culture. Bangladesh has a rich and unique
culture that has preserved, established traditions throughout history (En.wikipedia.org, 2020). But with the
passing time the western culture, not only influenced Bangladesh politically, economically, and socially, but
it also influenced their minds and culture to such an extent that even subsequent generations have absorbed
the influence as well. Westernisation has been spread throughout our country because of media and satellite
TV which are causing negative impact on society.

18
Cheap standard of life style
Rapid changes in diets and lifestyles resulting from industrialization, urbanization, economic development
and market globalization, have accelerated during the last decade and are having a significant impact on the
health and nutritional status of populations, particularly in developing countries and those undergoing rapid
socioeconomic transition. While standards of living have improved and the access to services has increased,
there have also been significant negative consequences in terms of inappropriate dietary patterns and
decreased physical activity and a corresponding increase in diet-related chronic diseases, especially among
the poor.

RECOMENDATION FOR ELIMINATIG NEGATIVE IMPACTS OF GLOBALIZATION ON

SOCIO ECONOMIC CONDITION OF BANGLADESH

The globalization process offers both opportunities and poses challenge for Bangladesh. It has both positive
as well as negative impacts. From the discussion we got overall idea about the positive and negative impacts
of globalization in socio-economic condition of Bangladesh.
Now we will discuss some necessary measures which can eradicate the negative impacts of globalization on
socio-economic condition of Bangladesh.
Proper Policy Making
Policymaking functions must be strengthened. One of the major weaknesses in Bangladesh administration is
the policy making and policy planning capacity. The incompetence of the democratic governments, which is
so obvious, is partly because of the institutional weakness of policy planning apparatus. This has to be
rectified by the practice of the democracy at all levels and induction of political appointees at higher levels
of government.
Enhancing the Modern Technological Base
Globalization is now largely based on a strong technological foundation. The electronic transfer of
information via Internet has now created an instantaneous and interconnected world of information resulting
in a 24 hours trading network. The advancement in information and technology will help disseminate
knowledge in the field of study and technology. Globalization is now only what technology makes possible.
Human Resource Development
The lack of quality education and skilled teachers, poor educational infrastructure and outmoded syllabus
are some major impediment to more successful basic education. For raising the standard of education,
monitoring and supervision, Bangladesh can establish some sort of institutional framework to enable the
private sector to take the lead in investing in the basic education sector. The government should exempt tax
on donation in the education sector so that the private sector feels more encouraged to play a more proactive
rote. For an industrial society of flourish, learning must receive the highest priority, a revolution must take
place I freethinking and the spirit of enquiry must be all pervasive.
Population Planning
Another sector warranting urgent attention is population planning. Unless population growth is arrested,
poverty reduction will be a distant dream. Population planning is not only family planning but it covers
matters relating to health care and sanitation is particular infant mortality care are of serious significance

19
Infrastructural Development
Infrastructure investment deserves priority attention because of its potential for employment generation.
Institutional strategies can be pro-poor on the one hand and on the other indifferent to poverty problem if not
adverse outright. Institutional reforms aiming at empowering the poor are fundamental to poverty
eradication. The various strategic can be in the areas of labor policy, land and tenurial laws, credit system,
small and medium enterprise (SME) development and above all restructuring of local governments. The
promoters and organizers of poverty programs must form coalitions or groups of the poor and at the same
time legal and regulatory support should be provided by the government. In Bangladesh measures should be
taken for the registration of the rights of sharecroppers with a view to providing good support to groups of
poor people so that they can put in their best efforts to improve their economic conditions. Such practices
are the empowerment of the poor. Above all mass education is the strongest empowering instrument; it is
indeed the great leveler.
Rule of Law
The broad category of issues relating to the rule of law is to be reorganized. This covers human rights, law
and order situation and the judicial system of the country. The rule of law is not simply a sine-qua-non for a
civilized society but also a precondition for investment growth and economic vitality.
Women Empowerment
It is also important that legal provisions are made for affirmative action for the poor and especially women.
Representation of women in political and social forum must be ensured empowering them, as they are the
most discriminated and deprived class of the society.
Poverty Alleviation
Poverty is a source of insecurity for Bangladesh. But whether globalization as such would alleviate poverty
is debatable. However, the alleviation of poverty depends on the capacity of Bangladesh to mobilize
resources in an optimum way. There is something that can be achieved if there is political stability inside the
country. A truly stable democratic system can function only when there are robust democratic institutions
and a vibrant civil society. Inability to achieve political stability would not only result in our failure to take
advantage of the positive aspects of globalization but our foreign and economic policy agenda would be set
outside the country.

Free Flow of Information

Bangladesh needs to take advantage of the opportunities that globalization offers through the free flow of
information and the use of English as an international language. This would help
produce a better-trained workforce capable of competing at the international level. It is well known that
productivity is linked to skills and knowledge.
Access to Market
Bangladesh has to negotiate preferential access to the markets of the western developed countries, as well as
those of India and China, huge trade gap in the bilateral trade relations has to be redressed. In the era of
competition, Bangladesh will not necessarily get what it thinks to deserve but only what it can negotiate.

20
Qualitative Education
Enrolling more girls to school and colleges is good provided they obtain certain skills in language and
quantitative analysis in the least. Currently very little is learnt and the system loss in failure to public
examination is huge. Education must be an essential element in poverty reduction strategy.
Integration of National Economy
The increasing integration of national economies into global markets if properly carried out, certainly
promises to alter dramatically the volume and character of the gain of Bangladesh from international trade
and resources flow in to the economy of Bangladesh. Besides, the increasing size, competitiveness and
diffusion of financial markets have the potential to draw the economy of Bangladesh into the global
economic mainstream if Bangladesh can create the necessary conditions and also fully exploit the
comparative advantage of Bangladesh in specific areas. The phenomenal success of the RMG sector of
Bangladesh is a case.
Benefiting from English Language
The process of globalization obviously requires a common language for International Communication. For
many different reasons, English has achieved the pristine of being that language. As a result of it has crossed
the national benders to reach people who speak other languages. As more and more people speak English,
more and more varieties have emerged which are strongly influenced by the pronunciation, grammar and
idioms of respective
mother tongues. World English has now move dawn way from the control of its native speakers. In order to
enhance ‘mutual intelligibility among users of the English language, English Language training should be
designed properly to promote productivity.
Capitalizing the Excellence of Professionals
Globalization is the subject per excellence for the engineers. The engineers have all through played a
significant rule; though never dominate one, in the globalization process. Engineers will have to join forces
with biologists, chemists, meteorologists, economists, planners, political scientists, ethicist and community
leaders in unprecedented ways to lead society on a sustainable path. They must play a much stronger role in
the public policy process to provide the right incentives for industry and other to move on a sustainable path
so that engineers can be supported and encouraged to design sustainable technology. The engineers of
Bangladesh should accept the idea of globalization as an emerging and powerful global reality and to
formulate strategies to manage it to minimize the adverse effects and maximize the gains from it.
Increasing the Productivity in Agricultural Sector
Unbalanced application of chemical fertilizers can be attributed for degrading soil fertility. Now the soaring
process of TSP and MP act as a disincentive to applying balanced dozes of fertilizer. Croplands are also
depleting fast and rice is grown on 75 percent of arable land, which does not augur well for other crops.
Seizing the opportunity of globalization, newer technologies should be evolved so that per unit productivity
sees a phenomenal growth. The wide gap between rice yields at breeders’ plots and farmer’s fields needs to
be bridged.

21
Problem Statement
In today’s post-Cold War world, security covers numerous areas to include: religious-cultural, socio-
economic, and politico-military concerns. Some of the positive aspects of the post-Cold War world are the
increased economic integration of free markets, technologies, and even countries (as in the European Union).
Some negative aspects include the idea that the security environment is enduring an “unstable peace” 4 and
a certain amount of chaos exists caused by a myriad of political instabilities and folksseeking to cause more
destabilization.2 Continuing global economic integration is clashing with global political violence. General
causes of instabilities tend to be exploited by bad guys such as rogue states, insurgents, terrorists, political
actors, drug traffickers, organized crime syndicates ,militant fundamentalists, and many others with a cause
and will to impose their selfdetermined desires to change a society, nation-state, or other perceived source of
power, in an image that fits their ideology.3 To ensure their survival nation-states like Bangladesh have to
wield their power, through many different means; some states, obviously, are more capable having more
means than others. Determining how best to wield powers of state and against whom to wield power is one
of the main tenets of security policy. Leaders of states have to determine what are the interests of the state
vis-à-vis the people it represents and take into consideration threats the state faces. With the security of the
state, and hopefully more southe security of the people, being paramount, a brief survey of the types of
threats confronting nation-states seems rather appropriate. Threats to nation-states will most likely come
from one or more of three types: internal (locally disaffected persons), external (hostile neighbors) or
asymmetric (Weapon of Mass Destructions, Cyber/Infrastructure attacks, Drug traffickers, ultra criminals,
and terrorists). Threats Bangladesh is likely to face over the coming decades fit within this construct.
Notable are: proliferation of drugs and arms, growth of organized crime, disenchanted minorities (ethnic and
religious) resulting in insurgency, foreign intelligence services using Bangladesh to their advantage,
insurgents from neighboring 5 north-east India attempting to hide-out, and the rise of religious
fundamentalism attempting to win power through revolution.4 Arrayed against Bangladesh are robust
threats that should concern its leaders. Leaders should consider how these threats are more or less likely to
arise, and how to combat or, even better; prevent these threats from becoming immediate dangers. One main
cause of concern currently being focused on throughout the world is the view that globalization is a security
threat to the state and permits the proliferation of the threats stated above. It seems easy to just throw the
woes of the world, all the security concerns at the feet of a newly contrived word--globalization. “At times,
it reaches a level where all the ills of the country, including pollution and deforestation, even minority
bashing and the sale of gas, are explained by finger pointing at the forces of globalization.”5 Essential to
being able to blame this new word would be a tacit understanding of what is meant by it. If globalization is
nothing new, why is it a matter of concern to students of security issues? Mostly because security is broader
than just defense, it also encompasses the realms of socio-economics, politics, and defense. Because
globalization is perceived as a vast subject that can impact all aspects of the world, or a nation, it becomes a
security concern. Countries able to develop infrastructure and maintain a general sense of law and order and
governmental stability have reaped growing benefits of development, as realized by higher levels of foreign
direct investment (FDI) within their countries. With Bangladesh’s immature communications system, lack of
solid law and order, as well as corruption and instability have so far negatively affected its growth potentials
and 6 development opportunities; subsequently Bangladesh has not received much comparatively in the way
of FDI to keep it ‘globalized.’ Bangladesh’s security will increase as development increases. Increasing
development will lead to fewer chances of internal threats. Increased economic and trade ties with neighbors
and friendly foreign countries will lead to an increase in external security, and also to more cooperation in
battling asymmetric threats that can embattle any country. As the United Nation’s panel expressed, “In the
area of economics, rapid advance of technology, sharp decrease in transportation and communication costs
and aseries of international agreements have led to greater internationalization of trade, finance and
investment. In this sense, globalization has contributed to higher productivity, to a rise in the living
standards and to new development opportunities.”6 It shall be considered whether Bangladesh will be able
to look toward the future and get the country moving in a direction towards greater foreign direct investment
22
“globalization” that will lead to economic freedom, more prosperity and greater security. Bangladesh as a
developing country is not immune to the challenges of globalization. In the era of globalization, she is
confronted with threats emanating from both external and internal sources. Under the impact of
globalization, development and economic security perception in Bangladesh has undergone some
perceptible changes over the past few years. Bangladesh faces vital challenges in terms of ecological
integrity, financial stability, identity and social cohesion from national, regional and global levels. The
country needs to protect her socio-economic, political and environmental interests to face the challenges in
the era of globalization. There is a cogent need to broaden the scope for prosperity through the creation of a
modern and 7 efficient economy. The challenge before the country is how to attain this goal in an
environment where major economic decisions affecting national life are often determined by the
international market.Economic globalization is a process of rapid economic integration between countries
that is driven by the increasing liberalization of international trade and foreign direct investment.
Liberalization of the economy in Bangladesh seemed an inevitable measure to meet the economic challenges
of globalization. Whether it has derived benefits for the country or not remains a point to be analyzed. Some
argue that the country has opened up to the world economy too fast and suffered in consequence, while
some wrangle that a low technological base and poor governance is responsible for her present hesitant
position. It could be understood that perceptible changes have occurred in the economy in terms of structural
composition, employment pattern and trends in growth of private and public sectors due to trade
liberalization.7 In the interests of the very survival of Bangladesh, there is a need to foresee the impact of
globalization on her economy. A thorough understanding of the impact may give a scope to fore plan the
whole affair and prepare for any likely ill effects on her economy. This may also help her maintain sustained
growth in the face of likely economic peril. In order to find out the most suitable option for Bangladesh this
research will focus on the following research questions.

RATIONALE
The crisis began with the bursting of the US housing bubble and high default rates on subprime and
adjustable rate mortgages, beginning in approximately 2005-2006. For a number of years prior to that,
declining lending standards, an increase in loan incentives such as easy initial terms, and a long-term trend
of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be
able to quickly refinance at more favorable terms. However, once interest rates began to rise and housing
prices started to drop in 2006-2007 in many parts of the US, refinancing became more difficult. Default and
foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as
anticipated, and adjustable rate mortgage interest rates reset higher. Foreclosures accelerated in the United
States in late 2006 and triggered a global financial crisis through 2007 and 2008. Hussain Zahid (2008)
pointed out that overall there is absolutely no reason to panic. Bangladesh is relatively insulated from the
financial side, but vulnerable to potential global economic slowdown, particularly in the US and EU. The
foreign exchange reserves of Bangladesh Bank and commercial banks have limited exposure to the
securities markets and banking system risk in the US and EU. Foreign capital flows are largely in the form
of concessional official lending. FDI and foreign portfolio investments are small. However, Bangladesh‟s
economy relies heavily on garment exports. This is where the main risk lies. Remittances may also be
vulnerable. Rashid Ur Harun (2008) noted that the export sector is potentially the most vulnerable in
Bangladesh since it depends heavily on US and EU economies. Imam Hasan (2008) found that there is
unlikely to be any direct immediate impact on remittances. Remittances in Bangladesh proved to be resilient
during previous financial crises in the world. The bulk (over 60 percent) of Bangladesh‟s remittances come
from the Middle East, and less than one-third come from the US, UK and Germany. Strong remittance
growth (44 percent) has continued in the first quarter of FY09. However Uddin Alal Md. (2008) revealed
that import is probably the one channel through which Bangladesh may benefit. Import payments in August
have reportedly been US$531 million lower than import payments in July. This decline in import payments
23
is mainly due to the fall in prices of petroleum products, wheat and edible oil. Record high oil prices last
year raised import payments to over US$20 billion in FY08, compared to slightly over US$15 billion in
payments in FY07. The gains on account of reduced import payments can be sizable. Bhaskaran Manu(2008)
mentions that with key donor countries in North America and Europe facing recession, Bangladesh could
well see a lower disbursement of financial aid which has been key to Bangladesh‟s poverty alleviation
Journal of Science and Technology, Vol. 6, 2008 186 strategy. CPD-ILO study team (2009) stated that
economic recessions tend to have adverse impact on all sectors and sections of the society; however it is the
poor and working class which generally suffers from the worst consequences first. Recessions have negative
impact on both employment and labor market. A survey of literature pertaining to the East Asian financial
crisis of the 1990s indicates that in the context of a global economic crisis the most vulnerable countries
including Bangladesh are likely to be export-oriented sectors, manpower export, remittance and domestic
resource mobilization. Aid inflow could also be hit by the crisis. So it is important that a review of the
repercussions of the current crisis is carried out both at the level of Bangladesh‟s partners in the global
economy, and also at the level of the domestic economy with its various sectoral dimensions. The central
objective of the study is to assess the financial crisis on Bangladesh economy. To satisfy this central
objective, the following are the specific objectives. a. To examine and analyze the impact of ongoing global
economic crisis in the context of Bangladesh. b. To assess the initiative those are taken by the government of
Bangladesh to address the attendant challenges. c. To develop policy suggestions by which these will both
help the economies in the crisis times as well as build resilience for the future.

DISSISSIONS
The Bangladesh economy has been growing at a steady pace for the last five years. GDP grew by 6.2% in
2007/08 (Table -1). The Policy Analysis Unit (PAU) of the Bangladesh bank estimates growth in 2008/09 to
register 6.0%, which is slightly slower than the previous years. This comparatively robust performance
points to the country‟s resilience to the global economic crisis so far. The resilience is derived from the
relatively small exposure to international financial markets, capital outflows and tourism. One important
area of concern is the export industry which is dominated by low-cost apparel exports to the United States
and Europe. However that should not be taken as an immediate concern.
Bangladesh GDP breakdown by industry

2008 has been an important year for Bangladesh. Certain important developments have helped shape the
economy and are likely to impact the economy in 2009.
Change in political leadership:

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The Awami League‟s (AL) landslide victory in the Dec 08 elections means a fresh political start for the
country after several years of uncertainty and instability. The new democratic government is likely to
enhance Bangladesh‟s investment attractiveness to foreign investors and could also help improve economic
policy decision-making process in the country.
Reversal in inflation trend:
The Bangladeshi economy relies heavily on the imports of essential commodities. Thus, the fall in
commodity prices in late 2008 will help alleviate inflationary pressures in the short term. However, the
longer term risk of inflation remains a function of monetary policies.
Growth maintained despite bleak global environment:
The ability of the economy to have withstood the crisis thus far is an encouraging trend as the domestic
fundamentals in the economy appear to be strong. Now a discussion will be made on the current and likely
impact of the crisis, and then study the primary factors for resilience. Finally, discussion will be made on the
policy measures adopted thus far.
The impact of the crisis
Bangladesh has been relatively unscathed from the crisis in the world economy. However, as the downturn
accelerates further and spreads to other markets to which Bangladesh has significant important links, the
indirect effects of the crisis are likely to affect Bangladesh‟s economy. Bangladesh is increasingly integrated
with global economy in terms of trade, investment, flow of remittances; its degree of openness was about 57
per cent at the end of FY2007-08, where contribution of trade was the highest (43.4 per cent) followed by
remittances (10 per cent) and ODA (2.4 per cent) (Table 2). About 85 per cent of Bangladesh‟s exports are
destined to developed economies and about 60 per cent of imports are from those countries. If India, China
and other emerging economies are also taken into consideration, the extent of exposure of the Bangladesh
economy with crisis-driven developed and developing economies will be quite significant.

Bangladesh‟s Degree of Openness and Extent of Globalizations (million USD)

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Gradual Slowdown in Export growth
Exports remain the most vulnerable sector in Bangladesh. The main exports out of Bangladesh are lowend
manufactured goods such as textiles and footwear. Readymade textile products from over 63% of total
exports from Bangladesh. Of the total exports over 70% are exported to the G7 countries. These figures
suggest that even a minor contraction of exports is likely to hurt the economy and in the less likely case of a
severe pullback, the consequences on Bangladesh may be worse. There might be a mild Journal of Science
and Technology, Vol. 6, 2008 188 slowing of exports given the relatively inelastic demand for the type of
exports Bangladesh concentrates on. Figure 1 and Figure 2 do suggest some volatility of exports in the
months leading up to October 2008. Exports of low-end apparels (accounting for 76 per cent of total export)
have been less affected in-spite of slowdown of import in both EU and USA (the so-called Wal-Mart effect).
Export growth in the first six months of FY2008-09 (July-December, 2008), at 19.6 per cent, remain robust.
However, slowdown is visible in recent months. Growth in Q2 of FY2008-09 (October-December, 2008)
was 1.2 per cent, a first time negative growth in recent times.

Volatility of exports Textile export

Source:
Bhaskaran Manu, (2008) Exports of primary products such as frozen foods, raw jute, and leather have been
adversely affected. Some of the promising sectors such as ship-building have seen orders cancelled. Some
export diversion from China – but higher discount asked, and lower C&M charge offered by major buyers;
at times orders being deferred.

Changes in Export of Selected Commodities during July-December, 2008 and Over JulyDecember, 2007
Source: CPD-IRBD Database

26
Inward inflow of Remittances
Remittances from overseas Bangladeshi workers form a significant portion of incoming transfer payments
in the current account balance. There are today about 981,000 Bangladeshi workers employed abroad, in a
total population of 140 m. The ratio of remittances to GDP has also increased from 3% in 1993 to 9.7% in
2007. Remittances from Bangladesh are mainly sourced from two locations, the developed market
comprising of the United States and United Kingdom, and Middle Eastern countries, namely Saudi Arabia,
Kuwait and the United Arab Emirates (Figure 4). Workers in the United States and Uddin et al. 189 United
Kingdom have increased over the past few years as can be seen by the remittance flows from these countries.
In the case of the Middle East, Bangladeshi laborers are employed in both construction as well as oil
production projects

Sources of remittance . Remittance over the period

Remittances are key drivers of household consumption. In Bangladesh, about 66% of remittances is used for
family maintenance; 12% to purchase land and 14% to repay loans. Only 5% is used for business investment
and just 3% is saved (Tasneem Siddiqui, 2003). In case of flow of remittances, though overall remittances in
2008 exceeded USD 9 billion, which was 37.3 per cent higher compared to the previous year; there is a
deceleration in case of growth of remittance flow since August, 2008 owing to low outward migration of
workers Figure 6. Month on month, number of workers traveling overseas have come down in 2008
compared to 2007. Although inflow of remittance per migrant was relatively higher (USD 1694) in 2008
compared to that in 2007 (USD 1476), unless more workers emigrated in 2009 this amount of inflow of
remittances is likely to slow down.

FDI in Bangladesh (million Us$)

27
Foreign Aid
Bangladesh has, till now, been able to maintain the trend of inflow of foreign aid amid the ongoing
economic recession in its major development partner countries. While total foreign aid during FY2007-
Journal of Science and Technology, Vol. 6, 2008 190 08 was 20.4 per cent higher than that of FY2006-07,
this increase for the July to October period of 2008 over the comparable period of 2007 has only been 1.6
per cent. It, therefore, gives a signal that if the recession continues, one may expect either a minimal rise in
foreign aid over the remaining period of the current fiscal or, perhaps not so unlikely, even a negative
growth. Nevertheless, overall balance of payment situation is still found at a healthy state.

Capital Market
A correction so far, not a crash one of the remarkable anomalies in the global financial meltdown has been
the resilience of the Bangladesh stock markets. While other emerging economy stock markets have crashed,
cut in half in a couple of months, the Bangladesh bourses have only experienced a mild correction - down 11
per cent from their peaks. Foreign capital inflow into the Bangladesh stock market has been limited. One of
the key drivers of growth in emerging market stock indexes over the last five years has been the influx of
large foreign investments. In the positive phase of the credit cycle, foreign capital flowed into emerging
markets driving up local stock indexes. But by the same measure, this capital is quick to flee when the risk
premium increases. In the negative phase of the cycle, the same foreign investors are pulling out of these
higher risk investments, leading to stock market crashes in emerging economies. This has happened in China
(stock market down nearly 60 per cent in 2008), India (down over 50 per cent) and Vietnam (down close to
60 per cent), for Bangladesh this number is closer to 5 per cent.(Imam Hasan,2008).Banks, while a large
segment of the stock markets, have been immune. Like many of their developed market counterparts, the
Bangladesh stock indexes have a heavy concentration of financial institutions; banks and other financial
institutions account for over 44.23 per cent of market capitalizations of the Dhaka Stock Exchange.
However, unlike their foreign counterparts, Bangladesh banks have not been big casualties of the global
financial meltdown, for reasons discussed earlier. This has meant that the Bangladesh stock markets have
been spared the erosion due to banking sector collapse in foreign markets. Export-oriented sectors a small
part of the index. The sectors that are likely to be the most negatively impacted by the financial crisis, the
export oriented sectors and commodity importers are under-represented in the stock markets, accounting for
less than 10 per cent of the market capitalization. As a result, even though these sectors are taking the first
brunt of the negative consequences of the financial crisis, the impact on the stock market is relatively small.
Macroeconomic Management and Domestic resource Mobilization
A large part of government‟s revenue comes from duties collected from imported commodities. Import and
import related duties mobilized during July-December, 2008 were respectively 4.3 per cent and 11.8 per cent
higher than those of the comparable period of 2007. However, month-on-month growth trend during the
July-December of 2008 over 2007 shows a downturn in import duty (starting from 35.7 per cent in July,
2008 to a negative growth of 13.9 per cent in December, 2008) and in import related duty earnings (from
50.8 per cent growth in July, 2008 to the negative growth of 12.2 per cent in December, 2008),

28
Employment and labor market There is no real-time information with regard to the Bangladesh labor market;
latest available data on employment and labor market was for FY2005-06. Based on this data set, a
projection was made with respect to employment scenario in FY2007-08 by the BB (Table 5). According to
the estimate, the size of the labor force was likely to be 51.8 million in FY2007-08; with 7.2 million in the
industrial sector and 19.13 million in the services sector. Among the workers of the industrial sector, 5.27
million workers worked in manufacturing sector, and 1.7 million in construction sector. Among the workers
in the service sectors, 8.46 million workers worked in trade, hotel and restaurants, and 4.21 million in
transport, storage and communication sector. According to the projection, unemployment rate in fiscal year
2007-08 was estimated to be 3.98 percent. Female workers‟ participation was about 12.1 million which was
29.2 percent of the total female population under the same age category. Participation of workers in the
informal sector was 37.2 million. However, it appears that under the changing scenario, with possible
downward revision of growth of GDP, and changes in growth-employment elasticity, the composition of
labor force in different sectors and the rate of unemployment may need to be reviewed .
Projected Employment in Major Sectors in FY2007-08

Migrant workers have tended to suffer from the ongoing financial crisis (Figure 4). Although number of
workers going abroad in 2008 (875,055) was 5 per cent higher compared to the previous year, the number
substantially declined when compared to the growth in 2007 over 2006 (118 per cent). More importantly,
Journal of Science and Technology, Vol. 6, 2008 192 month-on-month number of migrant workers has
started to decelerate from January, 2008 (140 per cent growth) and reached its lowest level in December,
2008 (-40 per cent) (BMET, 2008). Growth of migration in major markets is mixed. While in some of the
Middle East and South East Asian countries it was substantially high in 2008 compared to 2007 (85.2 per
29
cent in the UAE, 47.6 per cent in Singapore, 200.6 per cent in Oman, and 68.9 per cent in Qatar), in other
markets of these region it was negative (- 35.3 per cent Saudi Arabia, and -51.77 per cent Malaysia). Since
2006, UAE and Malaysia had been two key destinations for Bangladeshi workers followed by Saudi Arabia.
It is important to mention here that currently Saudi Arabia and Kuwait have stopped issuing work permits to
Bangladeshi workers, while these two destinations comprises of 39.7 per cent of total migrant workers from
Bangladesh. Thus, growth of outward migration will not be sustained unless recruitment of workers in Saudi
Arabia and Kuwait can be ensured.
Supporting policy in regime/ Policy response
There has been little in the way of policy changes made by the Bangladesh government and regulatory
bodies. The need for a stimulus package has not arisen yet but businessmen, economists and consumer
groups are pushing for more anticipatory and preventive action from the government.
Measures Taken by the Government
In January 2009, the government decided to constitute a broad-based national committee to follow the
developments related to the ongoing economic crisis and suggest measures to address the adverse impacts
on Bangladesh economy.( Addressing fallouts of global recession in Bangladesh‟, The Financial Express,
1st February 2009) A high-powered technical committee was earlier formed in early November, 2008 to
closely monitor the impact on the country‟s economy from the fallout of the current global financial crisis
and take instant remedial measures. The committee is expected to examine proposals which demand
increasing cash incentives for apparel exporters. The Ministry of textile and Jute will be coordinating with
the Finance Ministry to form a plan to protect and safeguard exporters. Government undertook a seven-point
strategy to ensure the well being of the Bangladeshi workers abroad and to explore new manpower export
markets. The government has been active in the remittance front by signing agreements with other countries
on manpower exports. An agreement with Libya has already been signed while deals with Jordan and
Bahrain are under discussion (Bangladesh, Libya to sign manpower export agreement‟, New Age, 31st
October 2008). Certain tax exemption schemes on interest income earned by the non-resident Bangladeshis
have also been introduced.
Measures Taken by the Central Bank (Bangladesh Bank)
The Bangladesh bank has set up a Forex Investment Committee to monitor and manage the currency
composition of forex reserves. BB prudently withdrew about 90 per cent of its total investment from
international banks which were perceived to be at risk. When the early signals started to blip on the radar
screen in 2008, the BB took speedy and energetic steps to safeguard the country‟s reserves (USD 5.98
billion in October, 2008), and also those of the commercial banks of the country (about USD 490.0 million
kept at the time with overseas financial institutions). Bangladesh bank has advised commercial banks to be
cautious about such investments. Bangladesh bank has recently instructed banks to take measures to reduce
the time and cost of transferring remittances by cutting down time and costs of transferring remittances,
bringing remittances through legal channels, creating opportunities for investment of remitted money, and
ensuring welfare of expatriates. It directed the bank branches or exchange houses overseas to keep their
organizations open on holidays to help expatriates remit funds. In addition, BB has continued with its policy
of intervention in the inter-bank foreign exchange market by selling and buying US dollar directly and
providing short term facilities to the banks aiming to keep the market stable. BB has allowed settlement of
import payments in Euro alongside the US dollar among the Asian Clearing Union (ACU) member countries.
In view of the losses incurred by importers as a result of the fall in global commodity prices (e.g. wheat,
edible oil and pulses) and the difficulties faced by importers in honoring L/Cs, BB has relaxed the Uddin et
al. 193 conditions for opening fresh letters of credit (L/Cs) from the existing 90 days' time to 150 days. BB
will continue its foreign currency support to the commercial banks mainly for making payments of fuel oils,
fertilizer and food grains import. The BB, in its Monetary Policy Statement for July-December, 2008 and

30
that of January-June 2009, has provided its policy stance envisaging possible impact of global economic
meltdown on the domestic economy. The Bangladesh bank has mentioned that it will give priority to
unhindered flow of private sector credit to productive sectors, with agriculture, SMEs, and the rural
economy being the prime targets. Engagement in agriculture lending has been made mandatory for all
private and foreign banks. BB will continue monitoring the liquidity situation in the banking system and
adopt appropriate measures to overcome any temporary pressure on liquidity. BB has also indicated that it
would conduct „surprise inspections‟ on banks and exchange companies to ensure compliance with foreign
exchange regulations and provisions of the Anti-money Laundering Act. BB report mentions that measures
would be taken to divert increasing amount of remittances toward investment in productive sectors to ease
the potential demand pressure and expand the economy‟s productive capacity. For facilitating more efficient
import of essential goods, BB has made available forward hedging mechanism to importers. In view of
collapse of house price bubbles in major economies, BB has taken up an initiative to construct a house price
index using time series data.

Measures Protecting the Poor and the Vulnerable

Under the public food distribution system (PFDS), government provides in-kind support to poor people and
those affected by natural calamities and disaster. Total food grains distribution in FY2008-09 (01 July-20
November) through PFDS was 697.89 thousand metric tons. Government has recently introduced the Rural
Employment and Road Maintenance Programme for the ultra poor and destitute women of some of the crisis
prone districts, namely Panchagarh and Rangpur districts. At the end of five years‟ guaranteed employment,
each will get cash worth of Tk.70,000 (USD1,020). During the project period, 52,000 destitute women will
be employed to work in the maintenance of 90,000 kms of road network in the northern part of the country.
Under the national budget for FY2008-09 government has introduced a new programme titled ‘100 Days
Employment Generation Scheme’ with an allocation of Tk.2,000 crore (USD291.5 million) to generate
employment for 20 core man-days (2.92 million) to combat Monga (seasonal chronic food shortage among
the absolute poor in selected areas) in greater Rangpur and Dinajpur districts.

Supporting Productive and Sustainable Enterprises to Safeguard Employment

A new programme has been introduced under the national budget for FY2008-09 with a monetary support of
Tk.20 core (USD 2.92 million) to provide support to low-income workers particularly for working mothers
of the garment factories. Under the national budget for FY2008-09, government has continued Second
Primary Education Development Programme (PEDP-II); as part of which 5.5 million primary students are
receiving stipends on annual basis. Total outlay for this programme is Tk.1, 800 cores (USD 262.4 million).
Under the national budget for FY2008-09, government has allocated an endowment fund (known also as
„credit whole selling‟) of Tk.100 core (USD 14.6 million) for the SME Foundation to provide credit to
SMEs through private commercial banks. The SME Refinancing Scheme of BB has been allocated Tk.500
core (USD 72.9 million) in FY2008-09 from Tk.300 core (USD 43.7 million) in FY2007-08.

31
CONCLUSSION
In conclusion, we are in the midst of a violent unwinding of a decade long cheap credit cycle, and the dust
has yet to settle. While Bangladesh has side-stepped the financial sector meltdown and sharp stock market
corrections being experienced by other nations, we remain vulnerable to the longer-term global economic
slowdown. It is prudent, in these times, to make informed and thoughtful reforms to our economic policies
and regulatory framework, but we must not give in to the impulse of isolationism. Given our stage of
development, Bangladesh can benefit enormously from the influx of foreign capital and intellectual property
into both the capital markets and the real economy. Integrating into the global economic cycle, while painful
sometimes is the only way forward to sustain prosperity. The policy implications of what is under our eyes
are given below:
 Policy makers have to make sure that markets do not panic by continuously providing evidence on the
economy‟s resilience in various sectors. They must proactively monitor the channels through which the
global financial turmoil may start creeping into the Bangladesh economy and take appropriate mitigation
measures.
 Against the background, private sectors are likely to shed employees in the country and as a result,
unemployment is likely to increase in the country. The government's principal aim is to keep unemployment
in check. A careful look at expenditure priorities is in order. Public spending that creates jobs, especially for
the poor, will be essential. Important examples include rural and other infrastructure (rural roads, irrigation
facilities, rural power); basic urban services; and well-designed safety net programs.
 Purchasing power must be increased of vulnerable groups by directly giving money or food for works so
that their basic needs are met.
 It is also apparently clear that the flow of foreign aid and donation in our annual budget will decline
because of the global crisis. But our national priority should be to reduce the dependency on foreign aid. We
have to ensure our self-esteem in the world as a self-dependent nation. We must create food safety net and
energy safety net right now to ensure our national growth to withstand the challenges.
 New business friendly policies may be adopted to attract foreign investment and a cut in interest rate by
Bangladesh Bank is an option to be considered to boost investment by private sectors.
 The ongoing efforts to increase the efficiency and effectiveness of the banking sector must continue. These
measures should aim to lower intermediation cost, reduce non-performing loans, improve banking services,
and strengthen prudential regulations.
 Real estate developers and garment manufacturers may be given more incentives in cutting taxes and
customs duties in importing raw materials so that engine of growth is maintained.
 Policy attention needs to focus on creating as much additional fiscal space as possible to prop up the
domestic economy while preserving macro economic stability. As noted, the decline in global fuel and food
prices has provided a welcome opportunity to regain the loss in fiscal space owing to previous higher prices.
This gain should not be wasted in reversing the policy changes made in aligning domestic prices better to the
global prices, especially domestic fuel prices. Additionally, efforts must intensify to raise public revenues.
 Finally, in an environment of constrained resources, greater attention to improving implementation
capacity and corruption prevention in public spending becomes even more important.

32
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Crisis. A paper presented at The ISEAS-World Bank Workshop on the Social Impact of the Asian Crisis,
June. The Institute of Southeast Asian Studies, Singapore.
Asian Development Bank. 2008. Asian Development Outlook Report. Update 2008, September.
Bangladesh Bank. 2008. Recent Employment Situation and Labor Market Developments in Bangladesh.
Policy Paper 0807, Policy Analysis Unit, June.
Bhaskaran M. 2008. The impact of the Global Economic Slowdown on South Asia. Asian Development
Bank, Discussion Report.
Bureau of Manpower Employment and Training (BMET)
Centre for Policy Dialogue. 2009 “CPD-IRBD Database”, CPD, Dhaka. Centre for Policy Dialogue. 2009.
CPD-Trade Database. CPD, Dhaka
International Monetary Fund. 2009. World Economic Outlook Report. January.
New Age. 2008. Bangladesh, Libya to sign manpower export agreement. 31st October. Rashid H U. 2008.
Impact of Global Economic Crisis on Bangladesh. Dhaka Currier, Issue-19.

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